Moving a Team From Being Transactional to Strategic

Challenges

  • A mid-sized business unit within a large industrial company had a new strategy that involved significant growth.
  • The majority of delivery was through sub-contracted supply partners.
  • Without a strong and resilient supply network the strategy could not be delivered
  • To reposition the procurement team from a transactional position in the organisation to being a supply chain team with a strategic role in addition to the transactional role.

Solution

  • Benchmark the current performance and the future need in terms of skills & FTEs
  • Provide input and independent validation of a strategy paper to the board
  • Support the development of the new organisation and its RACI
  • Develop a functional strategy to develop the current resource & acquire new resources
  • Develop a maturity model for annual skills & competency assessments at the individual & team level.

Benefits

  • Drove vendor consolidation from 3000 to 1100 vendors
  • 120 Tier 1 contract underwent extensive renegotiation resulting in 20% savings
  • Created “golden templates” for SOWs resulting in time savings through standardization
  • Created ability to review and negotiate 320-340 procurement contracts per resource per year resulting in fewer resource requirements
  • TCO savings from first full year of operation was 8%; larger savings in subsequent years after initial investments were paid off.

IACCM Infographic